Debt-to-Income Ratio Calculator
Calculate your debt-to-income (DTI) ratio to see how lenders view your borrowing capacity. Use it before applying for a mortgage, auto loan, or any credit product to check whether you meet qualification thresholds.
About this calculator
Your debt-to-income ratio measures the share of your gross monthly income consumed by debt obligations. Lenders use it as a primary underwriting signal — a high DTI signals repayment risk, while a low DTI suggests financial headroom. The formula is: DTI (%) = ((monthlyDebtPayments + proposedPayment) / grossMonthlyIncome) × 100. Most conventional mortgage lenders require a back-end DTI below 43%, and FHA loans allow up to 50% in some cases. The ratio has two variants: the front-end ratio (housing costs only) and the back-end ratio (all debts), with the back-end figure being most critical for loan qualification. Reducing existing debt balances or increasing income are the two levers you can pull to lower your DTI.
How to use
Suppose you earn $6,000 per month gross. Your existing debt payments total $800 (car loan $350 + student loan $250 + credit cards $200). You're applying for a mortgage with a $1,200 monthly payment. DTI = (($800 + $1,200) / $6,000) × 100 = ($2,000 / $6,000) × 100 = 33.3%. A 33.3% DTI is well within the conventional lending threshold of 43%, so this borrower would likely qualify. If the mortgage payment were $1,800 instead, DTI would jump to 43.3%, right at the limit.
Frequently asked questions
What is a good debt-to-income ratio for getting a mortgage?
Most conventional mortgage lenders look for a back-end DTI of 43% or lower, though 36% or below is considered ideal. FHA loans can allow DTIs up to 50% with compensating factors such as strong credit or large cash reserves. A lower DTI not only improves approval odds but can also unlock better interest rates. Paying down revolving balances before applying is one of the fastest ways to improve your ratio.
How does a proposed new payment affect my debt-to-income ratio calculation?
Lenders always calculate DTI using the new payment you're applying for, not just your existing debts. This is why the formula adds the proposed payment to current monthly obligations before dividing by income. Even if your existing DTI looks healthy, a large new loan payment can push it over the qualifying threshold. Running this calculation before you apply helps you right-size the loan amount to stay within acceptable limits.
Why do lenders use gross monthly income rather than take-home pay for DTI?
Gross income — your earnings before taxes and deductions — is used because it is a consistent, verifiable figure reported on tax returns and pay stubs. Net (take-home) pay varies widely based on voluntary deductions like 401(k) contributions, health insurance, and local tax rates, making it harder to standardize across applicants. Using gross income creates a level playing field for underwriting. Keep in mind this means your actual ability to service debt is tighter than the DTI figure suggests, since you pay taxes out of that gross figure first.